Aphria warns of hostile takeover bid
American cannabis retailer Green Growth Brands Inc. has formally launched a hostile $2.4-billion takeover bid for Aphria Inc., charging ahead with its attempt to acquire the Canadian licensed producer a mere three weeks after Aphria said it was not interested in the Ohiobased company’s overtures.
The all-stock offer would see Aphria shareholders receive 1.5714 shares of Green Growth, which closed Wednesday down 2.8 per cent at $5.81, for each Aphria share. That works out to a slight discount to Aphria’s closing price Wednesday of $9.23.
Green Growth, however, said it is also planning to complete a $300-million equity financing that values its own shares at $7, though the takeover offer would not be contingent on the financing deal.
“The combination of Aphria’s Canadian supply and wholesale agreements with Green Growth’s vertically integrated operations and rapidly growing retail footprint in the United States best positions us to capitalize on the massive growth opportunities in North America and beyond,” Green Growth CEO Peter Horvath said in a press release Wednesday.
The Leamington, Ont.-based company advised its shareholders to take no action on the hostile bid until its board puts out a formal recommendation. “We are determined to protect Aphria shareholders from opportunistic offers that fail to reflect the substantial value and growth prospects we have built at Aphria. We will evaluate GGB’s offer in this spirit,” said Irwin Simon, an independent chairman of the company.
Aphria recently announced a leadership shuffle that will see founder Cole Cacciavillani and CEO Vic Neufeld “transition out of their roles,” to be replaced by Simon and current president Jakob Ripshtein.
Neufeld had come under intense scrutiny from investors and Aphria shareholders after a December short-seller report accused him of “insider self-dealing ” through the acquisition of a number of Latin American cannabis assets.